Ladies and gentlemen, good day, and welcome to the SBI Life Insurance Company Q1 FY 2024 Result Conference Call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mahesh Kumar Sharma, MD and CEO, SBI Life. Thank you, and over to you, sir. Thank you very much. Good evening, everyone. We welcome you all to the results update call of SBI Life Insurance for the quarter ended June 30, 2023. We thank you wholeheartedly for your time invested in our analysis. Update on our financial results can be accessed on our website as well as on the websites of both the stock exchanges. Along with me, I have S. Veeraraghavan, Deputy CEO; Sangramjit Sarangi, President and CFO; Ravi Krishnamurthy, President, Operations and IT; Abhijit Gulanikar, President, Business Strategy; Subhendu Bal, Chief Actuary and Chief Risk Officer; Prithesh Chaubey, Appointed Actuary; and Smita Verma, SVP, Finance and Investor Relations. As you are aware, the Board of Directors has appointed Mr. Amit Jhingran as the MD and CEO designate of the company for a period of 2 years, subject to the approval of IRDAI and shareholders' approval. Amit has been my colleague at SBI. I want to assure you all that the company's growth trajectory and objective of creating long-term value will remain unchanged. My team and I personally will ensure the smoothest leadership transition of the company. Moving to performance update. Our comprehensive product suite, aligned with customers' need, coupled with our continued focus on improving the quality of business, maintaining a best-in-class cost ratio and persistency levels, has led to a decent performance on an exceptionally high base of last year's June quarter. During this quarter, we have taken a few tactical calls, like strengthening market position in the annuity business and investing in capacity building for employees and distributors with respect to handling the emerging needs of the customers and to support long-term growth. Let me give brief highlights of our performance for the June quarter. New business premium registered a growth of 11% over the previous quarter and stands at INR 62.1 billion, leading to private market leadership. Individual new business premium stands at INR 40.6 billion, with a strong growth of 18% and private market share of 26.8%. Gross written premium stands at INR 135.6 billion, a growth of 19%. Protection new business premium grew by 12% to INR 7.8 billion. Profit after tax stands at INR 3.8 billion, with 45% growth over the last period. Value of new business stands at INR 8.7 billion. New business margin is at 28.8% in June 2022. Assets under management grew by 25% to INR 3.28 trillion. A robust solvency ratio of 2.15 as against the regulatory requirement of 1.5. We shall now update you on each of the key elements in detail. Let me start with the premium. Individual new business premium has grown to INR 40.6 billion, with a YoY growth of 18%. Single premium contribution is 38% of individual new business premium, which is mainly attributed to growth in our individual annuity product. The company gained private market share by 2 million basis points to 26.8%. Our individual rated new business premium is standing at INR 26.7 billion, with a growth of 3% over the previous period, and maintaining our leadership position with private market share of 23%. As mentioned in my opening remarks, this is on the high base of last year's Q1 performance, which was one of the industry best with a growth of 86%. New group, New Business Premium stands at INR 21.5 billion with a share of 35% in New Business Premium. Having said that, we have collected total New Business Premium of INR 62.1 billion, registering private market share of 22%, where renewal premium grew by 28% to INR 33.5 billion, which accounts for 54% of the gross written premium. To sum up, gross written premium stands at INR 135.6 billion, with a YOY growth of 19%. In terms of APE, premium stands at INR 30.3 billion, registering a growth of 4%. Out of this, individual APE stands at INR 27.1 billion, with growth of 4%. During the quarter ended June 30, 2023, 4.19 lakh new policies were issued. Since 2010, the company has maintained its leadership position in number of policies issued and consistently delivered year-on-year growth for the last 10 years. This reflects the clear growth goal of the company to increase the penetration and achieve holistic growth. Total new business sum assured registered a growth of 44% over corresponding period last year, as compared to a growth of 42% at the industry level. Let me give you the details about the product mix. As on June 23, our guaranteed non-par savings contributed 14% of individual new business premium, and on individual APE basis, 22%. Individual unit new business premium is at INR 19.3 billion, which now constitutes 48% of individual new business premium. Growth in unit is attributed to positive movement in equity markets. Individual protection new business premium is at INR 2.1 billion, registering a YOY growth of 5%. This is against the previous year, quarter one, strong growth of 55%, where individual protection was showing a downward trend for the industry. Group protection stands at INR 5.7 billion, with a growth of 15%. Credit life new business premium has grown by 8% and stands at INR four and a half billion. On APE basis, protection contributes 12% of new business and registered a growth of 17%. Annuity business is at INR 13.1 billion and contributes 21% of new business premium. Under annuity, the company is offering immediate as well as deferred annuity option. Individual annuity business is growing at 129% over last year, the same period. This is mainly due to new business contribution of Smart Annuity Plus of INR 11.4 billion. Total annuity and pension new business underwritten by the company is INR 18.3 billion, registering a growth of 57% over the previous period. Moving to our distribution partners. With a strength of more than 58,000 CIFs, RBI and RRB bankers doing business contributes a share of 66% and grew by 21% in individual new business premium, and on individual APE basis, it stands at INR 18.5 billion, with a growth of 6%. Agency registered new business premium growth of 23% and contributes 19% in new business premium. Agency channel individual APE stands at INR 7.2 billion. As on June 30, 2023, the total number of agents stands at 2,22,822, a growth of 38% over the pre-previous period. During the quarter, the company added a net of 14,048 agents. During the quarter ended June 30, 2023, other channels, including direct corporate agents, brokers, online and web aggregators, grew by 62% in terms of individual new business premium and 18% in individual APE. Protection business through other channels registered a growth of 63% on APE basis. About the company's profitability, the PAT for the quarter ended June 30, 2023, stands at INR 3.8 billion, with 45% growth YOY. Our solvency remains strong at 12% and 15%. Value of new business stands at INR 8.7 billion. VNB margin is at 28.8% for the quarter ended June 30, 2023. The shift in VNB is mainly on account of increase in share of new business as compared to the previous year. Operational efficiency, the OpEx ratio stands at 6.8% for the quarter ended June 30, 2023. Our total cost ratio stands at 10.8% for the quarter ended June 30, 2023. With respect to persistency of individual regular premium and limited premium paying policy, 13-month persistency stands at 85.1%. The company has registered a significant improvement in the 37th and 61st month persistency by 262 basis points and 645 basis points, respectively. As mentioned in my opening remarks, assets under management stand at INR 3.28 trillion as at June 30, 2023, having growth of 25% as compared to June 30, 2022. The company continues efficient usage of technology for simplification of processes, with 99% of individual proposals being submitted digitally, 52% of individual proposals are processed through automated underwriting. Before I conclude, on behalf of the management, I would like to clearly state that the company's aspiration of FY 2024 growth remains unchanged. Our endeavor is to deliver better than industry growth. Secondly, our promoter and bank partner, SBI, is aligned with our holistic growth target. We have set out detailed plans to further leverage the network in-depth through data analytics, clear performance benchmarking, segmented approach towards niche markets, segments, et cetera. Our agency channel has been a flag bearer and has outpaced the private industry in many parameters. Our aim is to maintain the undisputed leadership position among private players through capacity building, both in terms of quantity, that is number of agents, as well as quality, that is financial advisory, considering the needs of the customer. Lastly, as mentioned in my FY 2023 annual results call, the Value of New Business will continue to grow at a healthy rate and margin will be range bound. We continuously endeavor to maintain our leadership position and continue to further increase our market share by offering products that meet the evolving needs of our customers. With our widespread robust distribution network, complemented by digital technology and above all, our people power, we are well positioned to capitalize the growth opportunities offered in the dynamic insurance landscape. The company is aligned with the regulatory vision. We'll continue to focus on various reforms, enabling deeper penetration of life insurance industry. Thank you all now. We are happy to take any questions that you may have. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Avinash Singh from Emkay Global. Please go ahead. Yeah. Good evening. Thanks a lot for this opportunity. two questions. The first one on growth. I recall your closing remarks just now, yet I just want some clarification. That in FY 2023, your growth had a different pattern, and of course, you did not have a high-ticket, you know, high-ticket non-linked share as like your peers. In that backdrop, if I recall, a 20% kind of Individual Rated Premium growth was the kind of ambition for FY 2024. Is that 20%, you know, kind of a number it still holds true? That's one that, I mean, Because, I mean, your product mix had been different than peers. That's why I'm going for absolute rather than talking about relative numbers. That's on growth. On distribution, my question is, if you can provide some color on non-SBI banks, I mean, the likes of the Yes Bank, Indian, the non-SBI banks, how they have been doing in terms of growth, what they say in the mix. Second, related to that, agency, I mean, you have been a very kind of a proactive in augmenting your agency network in the last 1 and a half years. I mean, in that backdrop, I mean, do sort of you expect this agency channel growth to accelerate further over the year, or is it that, okay, this growth is going to be maintained this year? Thank you. Yeah. Thank you very much for the questions. The growth, let me assure you that we are looking at the same kind of growth that we have been talking about. 20%-25% is what I would like to see. Yeah, 20% is definitely what we would expect. That is the first thing regarding growth. Now, coming to the agency channel. Agency, we have been growing the number of agents, and we have made some structural changes, so, you know, the results will be visible over the next 3 quarters for this year. You will see in Q2 itself the results of what, you know, the changes that we have brought about in agency. This has always been the most productive agency, I think, in the private industry, and we will continue to be at the very forefront of productivity, activation, and also the number of agents that we have. As you can already, as I have already said, we have 2.23 lakh agents, and we are improving their productivity and activation. Now, coming to the other banks, the bank partnerships, so we have, you know, excellent business there. Right now, we have 5% growth in the first quarter, but, you know, going forward, like, you would have noticed that we had a fantastic first quarter last year, which was like, record-breaking, I should say. We had 86% growth, overall, in individual, rated, we had, you know, overall 55% growth in, you know, the total NBP. That, to top that is very difficult, we have still managed a slim growth over that. You know, this just shows the kind of potential that we have, we continue to perform at those levels. It's the last year's numbers, they were coming on the back of, some, not so good performances for the first quarters, this performance, it comes right after the, good performance of last year. I think, that bodes very well for us. In terms of the other bank partnerships also, the first quarter is always to be compared with what growth we had last year. Going forward, we will again, we aspire to have a good growth number, + 20, in any case, is what we are looking for. Okay, sir. If you can help, sir, contribution of other banks in APE terms, I mean, what their percentage currently? 3%. Approximately 3%. Okay, sir. Thank you. Yeah, from the, you know, I love to... Thank you. Thank you. The next question is from the line of Adarsh from CLSA. Please go ahead. Just the previous question. Sir, sorry to interrupt, but the line for you is not very clear. We request you to please use the handset while you're speaking. My question is on the ULIP guidelines. Like, after the changes in ULIP guidelines... Sorry to interrupt, but... Hello, can you hear us? Yes, sir. I'm sorry, I was not able to hear you at all. Yes, sir, your line went on hold, sir. Okay. The question was, sir, the expensive management guidelines have been revised. There is chatter around what payouts can you do to SBI? Can one expect renegotiation that can commission or cost ratios to go up? If you can clarify if you had any discussions, thought process for the next 12, 18 months. Thanks. Thanks. See, the whole business of insurance, you know, it depends on how you what value you create for the customer and what value you create for the distributors. Obviously, it's going to be a balance there. With the change in the regulation, we will be reevaluating and, you know, IRDAI requires us to have a policy around that. Our policy will be, I mean, is under formulation. The moment we have a clear policy on that, we will take it forward. So that- Sir, the line for you is breaking up in between. We are not able to hear what you're saying. If you could please use the better connection, sir. Yeah, I'll try, otherwise I'll come back, right? Since we want to understand if these increased payouts will affect our VNB margins, any, what if it's more VNB margins you could indicate, even if the payouts are going up? Situation, you know, this is a very fluid kind of situation, not just because of these EOM guidelines or something. Earlier also, we were very comfortably placed in terms of the percent of expenses that we had considering our EOM limits. We never went for the EOM limit, you know, up to the EOM limit in the past also. We are not, you know, looking to these guidelines as an excuse to change the way we look at business. Our business will continue to be fair to our partners and our customers. I will not put any numbers out here, and I will definitely not like to, you know, commit to any kind of drastic change in my way of doing things. What we will ensure, which we have been doing in the past, and that is why we have been so successful as a company, is that we will make sure that there is enough on the table for the distributor and the customer. All right. From shareholder perspective, just want to understand. Sorry, I'm not able to hear. Can you kindly come back for the next question? I'm very sorry about it, but I really can't make out, you know, this is breaking a lot. Yes, sir, the line is breaking up in between. We request you to please rejoin the queue after you connect with a better connection, sir. Okay, thanks. Thank you. The next question is from the line of Sanketh Godha from Avendus Spark. Please go ahead. Yeah, thank you for the opportunity, sir. As I see, the product, the margin compression largely happened, seems to have happened because of your non-par contribution coming down, and that's the only product which has declined on year-on-year basis, while all other products seems to have done well. Just wanted to understand this is a conscious decision to not to grow, because I'm trying to read this number with the persistently also, because your persistently in the near-term cohorts, that is 13 month and 25 month, has deteriorated compared to the last year or a decline compared to the last year. Is the experience being poor and that's why you are conscious to not to grow this particular business? Or how do we read it? Because along with the when I see the previous question, if the expense towards the parent channel is supposed to increase and non-par is not going to grow, then it will have an impact on the margin. Just wanted to understand your view on this particular point, sir. Sanket, good question. What I would like to say is that you have noticed very correctly that it is a non-par component which has actually led to a reduction in the margin, VNB margin. That is absolutely correct. Now, you know, to read too much into that would be, you know, I think slightly jumping the gun, because like I said, last year, the same quarter, we had a huge growth in our premiums, and one of the contributing factors was that we had this huge pent-up demand for a non-par guaranteed income product, which we did not have earlier. We had a non-par guaranteed lump sum payment product, which was doing very well, Smart Platina Assure. We launched Smart Platina Plus last year around March, and March end, to be precise, about seven, eight days in March, and then the first quarter. The huge pent-up demand that we had and the agents and our distributors had already gauged, due to which we had launched that product, that got taken up in the first quarter, and that is why you are seeing a degrowth in this quarter with respect to the non-par product. Going forward, we are looking at a very steady growth in our non-par portfolio. There is no conscious effort to reduce or change the mix. You will probably recollect that every quarter I keep saying that we keep the customer at the center, and it is not a joke. We do keep the customer at the center. We offer products which are suitable. This quarter, we have seen a good traction for ULIP product returning. ULIP has always been a good product for us. One reason could be the market's excellent performance and our own fund's excellent performance over the last 5 years, and this is something which people are looking at. Last year, with the COVID uncertainties, non-par guaranteed was a very, what do you call it? Very favored kind of product, and I don't see the demand going away anywhere. It is only that compared to last year, 1st quarter, which again, I'll emphasize, was one of the highest growth quarters that we had, and that is the only reason why we are seeing a slight dip in that. Just to clarify, last year, non-par in the first quarter was about 30% of our business. Right. By the time the year ended, it was about 24%. Yeah. This quarter, there is a little slow start. We are at about 21, 22% of our business coming from non-par. Right. We would expect around similar 24%-25% of our business coming from non-par. Agreed. Last year, first quarter was a little aberration, like our MD just explained. Got it. No, the reason I was asking, sir, that number, absolute number, if I see, it is INR 5.8 billion or INR 580 crores, seems to be meaningfully lower compared to the run rate of INR 900-1,000 crores, what you did last year in every quarter. That's the reason I was just thinking that INR 580 seems to be meaningfully low number in APE terms compared to what you did every quarter last year. I also was trying to understand the persistency fall in 13th and 25th. Is something to read there or any reason for the persistency fall? Yeah, so that is something which we, you know, we think that every year we have this. You know, whenever we see that there is a dip or in persistency or there is no growth in persistency, we up our, you know, our efforts for renewals, and it's only a question of renewal. A lot of people were stressed in the last three years in terms of premium payments, et cetera. I think the priorities also, you know, keep shifting. It's only a question of how much follow-up we continue to keep doing. I think you will see within the next quarter, you know, all these things normalizing. Got it, sir. Just on the previous question, if you can, I mean, honestly, just wanted to understand, because our UAM are substantially lower compared to the peers. Given now there is no commission trap, honestly, to any product, so there is a likely possibility that the payouts, to our distribution channel, especially parents, could go up, and it could have a potential impact on the margins. Any measures you have taken, to counter that impact if it happens? See, I'll only say one thing, that our partners and especially SBI as a partner, has been very responsible in, you know, looking at the customers' requirements and also in growing the business responsibly. We do not envisage a situation where, you know, we are put in a position where we will have to, you know, dip into the customer's value to pay commissions or anything. We think that the payouts that are being made right now are largely in line with what should be paid out. There will be people in the industry who will probably try to gain market share or whatever, and there will be distributors who will demand more and more because, just because the leeway is available somewhere. I think IRDAI has also come out with a vast set of guidelines on what we need to look at before we formulate our policy with regard to commission payment and UAM. It is not that IRDAI has permitted companies to pay the entire UAM as commission and then go around, because there are a lot of senior management compensation and everything is tied up with the kind of performance that each of these companies is going to have. I think IRDAI, as a regulator, also realizes that there is a potential for some kind of, you know, misunderstanding in these guidelines. Therefore, they have come up with very, very, very extensive guidelines on what we should look at, while arriving at the commission, rates and the policy, you know, the board-approved commission policy. I don't see a drastic change coming up. Like I said, we will keep calibrating what constitutes good value for the customer and what constitutes good value for the distributor, and obviously, like you said, the shareholder. You know, all these, have to be balanced. Got it, sir. Last one. India productivity in the presentation is being mentioned as INR 4.7 billion per branch in NDP terms, which is almost one of the best in the industry. Just wanted to understand, the State Bank of India growth incrementally will be driven by productivity gains. I mean, is there further room for productivity gains or it is? All the possibilities are there. There is enough scope. India is hugely underpenetrated as an insurance market, so there is no dearth of growth. It is to increase awareness and to reach out to each and every person, you know, with a product that will suit his needs. Do the analysis properly, explain the product properly. You have a customer. Got it, sir. That's it from my side. Thank you. Thank you very much. Thank you. The next question is from the line of Rishi Jhunjhunwala from IIFL Institutional Equities. Please go ahead. Yeah, thanks for the opportunity. A couple of questions. Firstly, on retail protection, while we did really well, you know, in FY 2022, when most of the other players were struggling to grow protection, over the past 2, 5 quarters, if you really look at it, the growth hasn't been that robust given the kind of under-penetration we see in retail protection. We are also seeing some of our peers who were lagging earlier have started to pick up, in terms of growth, weaker base, of course. I just wanted to understand, I mean, what is it that, you know, we can do to accelerate this or do you think there are any particular reasons why this thing is slightly tougher than where it could be? No, protection. See, protection, we have been continuously growing protection, so there is not a single quarter, I believe, when we have actually had our protection dip or have a negative growth. We have been constantly growing. Right now, we have grown at 6%. Going forward, you know, like, we see the same trajectory like the previous years. Whatever we have grown, in the previous years in protection, we will grow. Protection has got a good potential, I should say. What does happen is that when you have a very good growth in all the products, then, you know, it is quite possible that in percentage terms, there may be a slightly lower growth seen here in protection. Because everything is growing, so everything grows at 20% or something. You know, protection, even if it grows slightly, less, you know, in terms of actual numbers, appears to have de-grown in percentage terms. That is the only thing that I would say. I don't think there is any particular thing to be read into, the protection growth numbers. Understood. Secondly, on, you know, the margin trajectory for FY 2024, just wanting to understand, you know, is there any particular kind of mix that you are thinking would play out through the course of the year, given the kind of changes that have happened on taxation, on UAM and everything, which could potentially change the mix of the margins, especially on the product side? I don't think so, you know, because I, I may sound very boring. I will again say that we do not push a margin down the throat of a customer. We ask the customer what he wants, offer him his needs, and then we have a whole bouquet of products, so he selects from that. You know, it's not as if I am saying, "Mera ye sabse jyada margin hai, ye main bech do usko." That is not the approach that we take at all, and I don't think that we are going to change it right now. The thing with margins is that it is a, you know, it cannot keep going up and up. Somewhere the customer value proposition will actually take a hit if the margin keeps rising, you know. To give a very small example, if you get a 100% margin, there is no way the customer is going to get any value out of it. Obviously, there is going to be some kind of a limit to the margin that we can achieve. Having said that, what do we do to maximize the margin, given the product mix that we think our customers would take? We design the products in such a way that they are beneficial to the customer as well as to the distributor, and obviously leave some margin for us. The margin is left only because there is a long-term value associated with that product. To answer your question, we would be looking to continue our non-par product. Then we have a very good demand in ULIP. We will continue with that. We have a positive margin on ULIP also. That is a very good thing. Protection, we will continue to grow. I think with this protection, credit life, non-par, and, you know, the kind of product mix that we have, we should be able to continue to have these margins. I think our current margin is also very good. At 28.8%, I think it's a good margin. Sir, so just to clarify, have we reached an equilibrium at a product level margin? As a result, from here on, the margin expansion would largely be driven by the mix change. Is that a fair way to look? Possible. I don't see the mix change and all. What happens, like last year, we had a mix change, we had a jump in the margins. This is not something which we can expect again and again, because there is a certain kind of a demand that is available in the market. Maybe if tomorrow we come and see that there is another product or something which contributes a better margin, which has got a great demand, maybe there is another spike coming up at that point of time. I can't see anything right now. We would be very happy to be around this range. Understood. Thank you so much, [Kiran]. Organic basis by improving other parameters. Not only that, I mean, I don't think margin is a very big thing. You know, it's a good story to write, but I still think that you sell more and more, you know, that is the way to make a company more profitable, you know. You sell more and more, it's like a supermarket and a boutique store. In a boutique store, you sell two, and you get a fat margin on that. In a supermarket, you sell everything, and you get steady margins on that. You have more customers coming in. Customer who buys atta today will buy pista tomorrow, but in a boutique store, he comes to buy only pista, and if he gets pista from the department store, he doesn't even come to your store to buy pista. You know, I don't think that it works that way. We are not looking at the margins per se, but we are looking at the sustainability of the business in the long run. How many customers, new customers we can get? How we can put them up the ladder of the margin journey? Understood, sir. Thank you so much. All the best. Thank you. B ye-bye. Thank you. The next question is from the line of Dipanjan Ghosh from Citigroup. Please go ahead. Hi, good evening. Just 2 questions from my side. One, on the annuity business, can you give some color on what changes are made also in product repricing that you witnessed, what is the strategy around that? The line for you sound muffled on the line, sir. Is this better? Yes, this is much better, sir. Please go ahead. Yeah. Just 2 questions from my side. First, on the annuity business, if you can give some color on the individual annuity part, was there any product repricing, or what is the strategy around that going ahead? Second, I think on the agency you mentioned, there has been some strategic changes, which should give higher growth or deliver from 2Q onwards. Yeah, thank you. On the annuity, you know, if you look at the individual annuity, we have grown by 128% in individual annuity. That's basically, you know, there are two parts to it. One, I think the annuity rates were pretty decent last year, that contributed. It also contributed that our people, you know, reached out and created awareness, and they were able to, you know, get people to think about their retirement life and were able to sell more annuities. That is, you know, as far as the annuity piece is concerned. There is nothing much to do there. Only thing is that we will be looking at these products very carefully and align the rates with the market so that, you know, we are not too much on either side of the market. Coming to your question on the agency, we have made certain changes. You know, I would not like to elaborate on all the changes that we are making, but some of the changes is that we are recruiting more and more agents, and we are having more engagement with the agents, and we are also helping them to garner leads. We are doing a lot of activities where the agents can get leads. We are also showing them, you know, we are training them much better, and we are having more and more closer interactions with our agents to show them that they already have a, you know, a good market around their, in their own environment, so that they can go and prospect for business much better. These are the two changes. There will be a huge difference that you see in the days to come. As regard numbers, we have already started growing the numbers. The productivity will follow. Sure. Thank you, and all the best. Thank you. Thank you. The next question is from the line of Nischint Chawathe from Kotak. Please go ahead. Hi, am I audible? Yeah, yeah. You know, you reported, you know, fairly impressive 17% growth in unit policies. I was wondering, what is driving this? Is it just that because equity markets are doing well, you know, is it just that, you know, the uptake is strong, or, is there a conscious push from your side for units? No, I don't think we have ever pushed or, you know, stopped pushing for unit. It is a function of the, you know, overall market, the way people are perceiving. Like, you know, you would see in the last couple of years, a lot of non-par guarantees got sold. It was purely a function of the experience of the last 3 years, where, you know, you were uncertain about your income and all, and the first thing that you wanted to protect was future income. Now, you know, the people are thinking about the markets going up, and a lot of people, we already had a very good, very good customer feel around our unit products. We always were doing very well. In fact, some of the other products that we got in was because we were slightly over weight on units, I should say. That is why we got many of the other products now. Therefore, the mix has become much better, but we are confident that, you know, ULIP will continue to do well because it's a very good product. We have been giving excellent returns to the customers over 3 years, 5 years. If you see our returns, they have been fantastic. We keep explaining to our customers that the longer you stay with us, the more money you can make, and also you stay protected with insurance. That is the most important thing. You know, while you are building up your corpus, you are covered with insurance, which no other investment will give. This is something which actually works for us, and we continue with that. you know, to get the point that, you know, [Abhishek], you made, that you're looking at, you know, the share of non-par to kind of increase from 23 to, like, 25 at the end of the year. I mean, if you're looking at the direction of the market, I think in all possibilities, you know, non-par will remain or go down, given the way interest rates are headed, and probably ULIP will kind of continue to do well. you know, you know, in that sense, is it, is it kind of fair to say that maybe the businesses of last year, you know, may not really be what this year could look like? The business mix is not really going to change much. I mean, like, you know, unless there is a sudden spike in one of the demand for any of these products, you know, sudden spike in demand for ULIP or sudden demand. Otherwise, you know, like, the non-par product is a guaranteed product, is a very good product, and, you know, when the rates are going down also, then there is a very good need to lock into the higher rates. That is something which definitely will play on the minds of people, and there will be a demand for that product. There are different kinds of people. Some people would like to get into the market-related kind of returns, some people would like the safer kind of returns, the non-par product still offers the tax benefit if it is taken, you know, if it is below INR 5 lakhs in a year, our big market is in that segment. I don't see a drastic change in the. Yes, I mean, like, you know, with factors and all, you can never say. It is today I say 60, 25, 15 or something, tomorrow it turns out to be 58, 28 something. I mean, like, it's okay. I mean, like, we are okay with that because we have the risk management strategies, we also know how where to invest and get good returns. Okay. You know, the second question is essentially on group protection. You know, that has grown pretty fast, this is all, you know, group protection products or? Yeah, group protection, you know, it's a lumpy kind of thing. I mean, you get, you work on various corporates for some time, and then you get the business. It's a big function of two, three things, you know. One is your connect, your ability to service. You have to prove that, you know, your product is will be serviced quickly. Your employees will, you know, when they come for a claim or something, they will be serviced very fast and will not have to go through trouble and all that. That, you know, once the corporate is convinced, then, you know, the business comes up in a big amount. Sometimes it's a 1,000 people who are covered, sometimes it's 10,000 who are covered. I mean, like, it's a very lumpy kind of thing. You can't say. The effort for each corporate would be approximately the same kind of effort, but the numbers that you get will be different for different corporates. How much would be the growth in credit life in that case? We have credit life also. Credit life, you know, that is something which has been growing very well for us, and I think it will continue to grow very well because disbursements are going to keep growing. As the market grows, as everything, economy grows, the disbursements will grow, and as the disbursements grow, the attachment rates will be better and, you know, even with the same attachment rate, the amount of credit life we sell will be higher. Perfect. That answers my question. Thank you very much. Thank you. All the best. Thank you. The next question is from the line of Madhukar Ladha from Nuvama Wealth Management. Please go ahead. Hi, thank you for taking my question. Couple of things. One, on persistency, any particular cohort where persistency is lagging, is it in the non-par segment or? Because we sold a lot of non-par last year, 13-month persistency is getting impacted because of that. Some color over there would be helpful. Second, what is the timeline for all this discussion with SBI on, you know, the increased commission payouts, et cetera? Related to that, have we started building any part of it? You know, based on, you know, whatever your expectation is, are we building any part of it in our current VNB that we have declared right now at 28.8%? Yeah. Finally, the agency channel this quarter, year-over-year, has declined by about 5%. Any color on that? What has resulted in that happening? Yeah. Persistency, though, I think, we agree that there is a slight dip in persistency in the 13 month and slightly higher dip in the 25th month cohorts. Like I said, you know, it's something which we should be able to remedy with closer calling and, you know, explaining to our customers. We have a very good team that does this, and we will, you know, in the past also, in the last 3, 4 years, we have always seen that whenever there has been some kind of a flatness in the persistency, we have always been able to increase it. Right now, if you compare the persistency with what we had 3 years back, we have very good persistency. We have improved the persistency like anything. It's if you're comparing with March 2023, yes, there is a slight dip in 13 than 25th. No particular product contributing significantly to this thing as far as my own analysis is concerned. Of course, we will be looking at even more granular data and trying to see if we need to do something, some, you know, follow up somewhere much more, but that's about it. Coming to the timelines, I never said that we were in discussions with SBI or anything, so I don't think, you know, that whole question arises. SBI is a very close partner, and, you know, we have many other partners also now in banks. Discussions do keep happening all the time on all the aspects of the business, so I will not say that, you know, we are talking about commission or whatever, or whatever. There is nothing for me to say at this point of time on that. I think my earlier answer was very, very comprehensive on the EOM and commission, so I don't want to say anything further to that. Agency, yes, you are right, there is a 5% drop in agency numbers. As I said, we have initiated a number of steps, and we have grown the numbers quite healthily. You know, our initiatives are already there to keep the distribution engaged and also to train them and to make them... It is, you know, by design that we have the best agency in the private sector. It's not by luck or by chance that we have the best agency. In spite of having one of the strongest banker relationships, we still have the biggest agency. Our agencies cost INR 4,000 crore last year, which is much more than many of the company's total business in the industry. Really speaking, there is nothing much to say about agency. Development efforts are going on to take the agency channel to the next level. Yes, this, I would say that this is a kind of flattening that comes when you are doing a lot of development efforts. Just one thing, have you built in any increase in EOM in your margin reporting of this quarter? I would request Rajesh to answer. Thanks, Madhukar. See, if you see our EV exposure on 31st March, each year we do that, you see that we make the operating profit even on account of the persistency. We always keep saying that when we set our e- base estimate assumption, we always use the assumption, which is sustainable longer term. We don't capitalize the moment up and down. To that extent, our yearly margin and assumption used in the computing of yearly margin is very stabilized, and with a certain fall in the persistency, is not going to impact our persistency assumption. In fact, if you recall, in the market, we explained that there is a further scope to further improve the persistency on account of the experience. To conclude, I don't see this experience will have any adverse impact in our yearly margins. My question was more with respect to EOM. If are we building any increase in EOM in our view of the assumptions? EOM, I think if you see this, we always use the expenses. What our MD also explained on the EOM part, that our expense, we are most efficient company. We use this, I don't see there will be much impact will come on the EOM perspective as well. We have not built up anything that going to be impact adversely. See, typically, you see, we don't change our assumptions in Q1. We change it once a year. When we do that, we will have a review of everything, including your any expenses that might come. Understood, sir. Okay, all right. That's it, all the best, sir. Yeah, thank you. Thank you. The next question is from the line of MW Kim from JP Morgan Securities (Asia Pacific) Limited. Please go ahead. Yeah, thank you for the opportunity. I have two questions. The first is about the new business value movement. Could you please share a bit detail on the operational assumption changes for a year? Well, this is more related to the year better than expected loading margin due to the bigger scale or the other factors like proficiency, as you mentioned, or the mortality. Just want to understand that where we would see the positive delta on the total margin. The next question is about the regions on the higher surrender ratio. Is it due to your previous product related the savings policy? That's two. Thank you. I will explain. The margin is coming on account of product mix, and that will explain that we don't change the any assumptions in the quarter end. What we do that we look into the year end experience. Based on that, we set up our assumption. Our assumptions are truly aligned to the dividend, excellent experience and emerging trend to that extent. To that we have been incorporated. In this quarter we have not changed any assumptions. You're comparing with the last June to this June, and in the month of March, when you close the year end, we have made the assumption change. That's the reason we see the year end walk, there is a impact reflecting in the assumption change. On the surrender ratio, which you were mentioned about higher as compared to last quarter, it was predominantly due to the four years back products of the ULIP, which have been surrendered, and the payouts are happening now. Because the market is on higher side, so the AUM of those funds have been gone up substantially. That is the reason the spike which has been seen here as a surrender ratio is being higher side. Otherwise, there is no difference between the current surrender or the previous surrenders. That's all clear. Thank you. Thank you. Thank you. The next question is from the line of Supratim Dutta from Ambit Capital. Please go ahead. Thanks for the opportunity. Three questions. Starting with the first one. You have indicated that productivity for SBI branches around INR 47 lakhs. Could you let us know what is the productivity in the metro branches versus the non-metro branches? That would be one. Number 2 would be, when I look at your VNB work, I can see that there has been a 110 basis point negative impact from operating economic assumptions, and that typically translates into a 100 basis points with period movement. Just wanted to understand, you know, what has resulted in this movement? Because when I look at the yield curve, I don't see that, you know, there has been the significant movement. That's number 2. lastly, on the group protection side, could you give us the split between group term and credit life, and what is the attachment rate in SBI Life? Those are the three questions. Yeah. What was the first one? The last one, I take the first one, about 45 is coming from credit life, and the remaining is from group, you know, GTIs. Group GTIs. Yeah. last question that I'm asking, answering first. The first one was regarding the breakup. You know, really speaking, it's a very vast kind of thing. We give the average, I think it is very indicative. I don't think there is anything to read into individual, you know, metro figures. On economic assumptions, Rajesh will speak to you. Yeah. If you see the economic assumptions, if you see the yield curve, as compared to the Q1 previous year, Q1 FY 2023 versus Q1 FY 2024, in the shorter end, you see there an yield curve is straightened up, whereas in the longer term, there is a yield curve is flattened. What happened? Because in this quarter we have the yield, the high proportion of yield, right? That will have some impact, adverse impact on the, on the yield. Whereas, later duration, when yield curve is flattened, we have another negative impact on some of the non-core traditional business. That's the reason we see this impact. We'll be comparing this from the last quarter, Q1 FY 2023 versus Q1 FY 2024. Got it. it. Got it. Got it. Thank you. Thank you. Thank you. The next question is from the line of Neeraj Toshniwal from UBS India. Please go ahead. Yeah. Hi, sorry I'm asking on the same question, likely payouts increase to SBI Bank. Also wanted to just follow on the payouts to other than ICICI Bank, other than SBI Bank, what is the likely terms will be at, or should we be having some revisions there as well? We, you know, I wouldn't like to discuss individual relationships or the rates at this point of time. I can say that, you know, we have been sticking to the guidelines issued by the regulator, we have been able to do excellent business all along. I don't see us coming under any pressure just because there is a change in the rules. Like I said, we will keep the customer value and the distributor value in mind. Obviously, I have to think about my shareholder value also. All three things put together will determine what we do. We have been doing extremely well. I don't see a sudden drastic change in our course. Can we expect contributions from other than SBI Bank to keep going forward, given there will be very less might be difference between the rates in the two banks now? See, I'll tell you one thing, wherever, whatever relationships we already have with the banks, many of them we have a good percentage of the business that they are doing. You know, we have been adhering to all the rules earlier, and we have still been able to manage to do very good business with the other banks. I think going forward also, we can expect good growth. Okay, in your opening comments, you did mention on data analytics. What are we doing there? Can you elaborate? What you were saying or your opening comments, what did I say? You did mention data analytics as one of your points. Wanted more color, what are we doing there, and can that lead to- It works, it works in many, many ways. One of the ways that it works is that, you know, our bank partners, we work with them, and we do data analytics, like, for example, you know, the, you know, app that we are able to do. In this first quarter, we have covered 2.35 lives with term insurance. How do we do it? Very simple. The bank, along with our analytics, the algorithms, they pitch to the customer a particular product, and the customer can buy it in three clicks. That's one of the examples that I have. The other thing is that we use it on our own data to make sure that, you know, we give the next best product to our customers to pass it on to the distributor, that this is the product that you should be selling to the customer now, and this is the need for this for the customer, et cetera. A lot of ways in which we are using data analytics, so, you know, Abhijit, would you like to add something? No, sir. We also work on persistency also, we are using data analytics. The propensity to pay. We follow up more on, you know, wherever we find that the analytics shows that somebody has got a lower propensity to pay the premiums on time, then we work on those people, and then, you know, we get. 100 myriad ways in which we are using it. predictive analytics is one of them, so just as to what kind of profile he is and what kind of product we can offer to them. The next best product. Basically, why I'm asking is because we were setting our own call center, apart from, you know, getting the business through the broker channel, because it is very expensive or much higher than the our own costing. Wanted to understand if there is a possibility. There is a lot of break. Our data analytics is smart about the call center. Our data analytics is trying to. Yeah, so call center, see, what you are saying, Prithesh, I think what he means to say is whether we are using the contact center also along with the analytics. Our model is that we don't directly directly sell when we get a customer through a particular channel, so the channel will sell for us. Any analytics is done through the channel. Sure. Got it. Thank you. Thank you. We have the next question from the line of Swarnabha Mukherjee from B&K Securities. Please go ahead. Yeah, thank you for the opportunity, sir. Three questions from my side. First of all, SBI has shown, you know, a little bit softer growth compared to what it was historically in the last two quarters. Just wanted to understand, you know, what is going on there. Is there any change of instance for the distributor towards a particular product segment which is resulting in this? Some insights on that would be helpful. That is the first one. Secondly, in terms of the growth guidance that you have mentioned, around 20%, just wanted to check whether this is in terms of total EP. If so, given that this quarter was a slow growth quarter, I think for the remaining three quarters, you need to grow at fairly strong rates to meet this guidance. Wanted a little bit more granularity on your thoughts on, you know, from where do you expect this growth to come from. Also, given that third quarter last year was a pretty strong quarter, so you will have a high base there. Wanted to understand that. Thirdly, sir, you had mentioned in the opening comment that margins going ahead would be range bound. I just wanted to know, you know, from you, where do you see the lower limit of that? For example, since you have mentioned that ULIPs have seen a lot of traction this quarter, if the mix of ULIP goes up, then can we see, margin levels go back, go down further? Yeah, these are broadly three things that I wanted to understand. SBI, you know, like I said, we have shown some 7% growth in SBI, and in this quarter over the last quarter. June quarter was a high growth quarter over the 2021 quarter, June quarter. To maintain that growth and further grow on it, even by 7%, is a very decent thing. Going forward, you know, because the growth over the previous years was not so much in the later quarters, not 86% and all. I don't think there should be an issue with our growth, because the numbers are already coming. Like we, like we said, it's just a question of, you know, the first quarter generally used to be weak. Last year was very, very good. Every year, the subsequent quarters are very good. Especially the second and third quarters are very good, and the fourth quarter has been also very good for us almost always. This is a pattern that we see, and therefore we will end up achieving the target that we are looking for. Coming to the next one, the margins. Margins, you know, margins are, I have always maintained, and this is not the first time that I'm saying this. I have been asked this question every quarter, and I always say that we are happy with margins around 28%-30%, and we continue to hold that view. We are not going to be held hostage by any particular number. You know, we are not going to change our entire business philosophy just to maintain, say, 30 or 29 or some notional number. I think 28.8 is a very good number. At the same time, we would like to be around this place. That is why I said the rate bound thing. understood, sir. Sir, in terms of SBI as a channel, if you could give some color, you know, what is going on there? Yes, SBI, I already told you that SBI has been growing very well. Over a very large growth, we have been able to grow by 7%. Going forward, we will continue to grow. Okay, okay. Okay, understood, sir. Understood. Yeah. Okay, thank you so much for the responses. Thank you and all the best. Thank you. All the best. Thank you. Ladies and gentlemen, we will take one last question, which will be from the line of Prayesh Jain from Motilal Oswal. Please go ahead. Yeah, hi, good evening. Just a question on ULIP. Have we seen any mix shift towards debt products more compared to equity, or is there a demand for, you know? How does, in case, you know, the way the tax has moved, do you think that the debt products will be more in demand, and how would that impact your margins on ULIP in particular? We don't see any movement towards debt or indeed, in fact, it's reverse. Over the last three years or something, we have seen a massive shift towards equity. Yeah. Okay. My question was more related to, you know, the way the tax has moved on the mutual fund side, and is there a demand for that you foresee that will come up from ULIP for debt products, and that could have some implication on the mix and a resultant on ULIP margin? I don't think my product is directly comparable to the mutual fund product at all. You know, we are assured, we have insurance. You know, somebody who wants to build up a corpus, he builds up a corpus for, say, he's decided to build up a corpus for his child for 10 years or something, and he dies after 2 years. We give him the some assurance, which makes sure that the goal is, you know, reached by his family, even without his presence. There is no other industry, financial sector which can give this protection. You know, the first thing is to, you know, to disassociate the normal kind of investment from insurance. Insurance is totally different. Having said that, what we see is that as a trend, people who are going for ULIP products with our company are seeing the extremely good performance of our funds, and they are taking more and more equity portion in their portfolios. Great. Mainly on the ticket side, while, you know, you had a very low share with regards to the 5 lakh plus ticket size, what has been your experience in 1, 2 with respect to that cohort? How is that kind of seeing, what is the kind of share of that particular cohort? See, one thing is that, you know, the tax angle, there was some kind of a tax arbitrage for, probably some people. I don't believe that INR 5 lakh, anybody who was investing INR 5 lakh was actually getting, you know, a very huge tax arbitrage or something. Yeah, possible that people who are investing more than INR 10 lakh or INR 15 lakh or something could have been looking at it from that kind of angle. Really speaking, you know, all these people would have been those who would have either bought annuities or invested in some similar kind of a thing, and that was already taxable. Now that this non-par guaranteed is also taxable, they'll probably have a better choice between the two. Okay, great. Thank you so much. Thank you. Thank you very much. Thank you. I now hand the conference over to Mr. Mahesh Kumar Sharma for closing comments. Over to you, sir. Thank you, everyone. Extremely kind of you to have come up and, you know, interacted with us. You may get in touch with our investor relations team in case you have any follow-up questions. Have a great evening, and all the best. Thank you. On behalf of SBI Life Insurance Company, that concludes this conference. Thank you for joining us. You may now disconnect your lines.